A risk assessment conducted by the U.S. Treasury Department found that non-fungible tokens (NFTs) and related platforms are highly susceptible to use in fraud and scams. The risk assessment also warns that criminals can exploit NFTs to launder illicit proceeds or “obfuscate the source of funds.” NFTs Likely to be Used in Fraud and Scams […]
Bitcoin News
Hong Kong’s SFC Issues Warning on Floki’s ‘Highly Risky’ Staking Programs
A Hong Kong watchdog, the SFC, has cautioned investors about the enticing yet potentially risky ‘Floki Staking Program’ and ‘Tokenfi Staking Program,’ which offer high annualized returns without the required regulatory green light.
SFC Warns Against Unregulated Floki and Tokenfi Crypto Staking Programs
The Hong Kong Securities and Futures Commission (SFC) has issued a public warning against the “Floki Staking Program” and “Tokenfi Staking Program,” two crypto-related investment products promising unusually high returns.
Both programs, associated with the Floki ecosystem, offer cryptocurrency staking services with promised annualized returns ranging from 30% to over 100%. However, the SFC states that these products have not received the necessary authorization for public offering in Hong Kong, thereby placing potential investors at risk.
Staking, a process akin to depositing money into a savings account, contributes to blockchain operations. Staked cryptocurrencies are locked up in a project. The project then uses these staked coins to maintain its operations, such as validating transactions. Despite its growing popularity, the SFC warns that such arrangements might constitute unauthorized collective investment schemes.
The SFC’s investigation revealed that “[t]he administrator of the two products has also not been able to demonstrate to the SFC’s satisfaction how the high annualised return targets could be achieved.” As a result, the SFC included both the “Floki Staking Program” and “Tokenfi Staking Program” in its Suspicious Investment Products Alert List on Jan. 26.
Addressing these developments, the Floki team acknowledged the SFC’s concerns in their weekly recap live spaces on the X. They contended that the SFC’s primary issue was the programs’ high performance. While confirming their collaboration with a marketing agency for the promotion of these programs, Floki admitted to a lack of clarity regarding the continuation of their campaign in Hong Kong. They assured investors of their commitment to comply with local regulations.
In addition to the risk of participating in unregulated schemes, the SFC cautioned investors about the allure of “too-good-to-be-true” returns. The SFC underlined that such investments could lead to a total loss, with minimal protection under the Securities and Futures Ordinance (SFO).
The SFC has stated its intention to take appropriate legal action against any breach of the law, including the promotion of unlicensed collective investment schemes.
Do you think the SFC is doing a public service by warning people about Floki’s staking products? Share your thoughts and opinions about this subject in the comments section below.
SEC Announces ‘Highly Productive’ Year for Crypto Enforcement Actions
The U.S. Securities and Exchange Commission (SEC) has published its latest enforcement results relating to crypto assets. “Fiscal year 2023 was another highly productive and impactful year for the SEC’s enforcement efforts relating to crypto asset securities,” the regulator described. “The investing public benefits from the Division of Enforcement’s work as a cop on the beat,” SEC Chairman Gary Gensler claimed.
SEC’s FY 2023 Crypto Enforcement Actions
The U.S. Securities and Exchange Commission (SEC) announced its enforcement results for the fiscal year 2023 on Tuesday. The securities regulator revealed that it filed 784 total enforcement actions, a 3% increase over fiscal year 2022. SEC Chair Gary Gensler commented:
The investing public benefits from the Division of Enforcement’s work as a cop on the beat.
Regarding crypto assets, the SEC stated: “Fiscal year 2023 was another highly productive and impactful year for the SEC’s enforcement efforts relating to crypto asset securities.”
The securities regulator explained that it has taken various enforcement measures within the cryptocurrency space, encompassing “billion-dollar crypto fraud schemes, unregistered crypto asset offerings, platforms, and intermediaries, and illegal celebrity touting.” The SEC then highlighted a number of high-profile cases involving Terraform Labs and its co-founder Do Kwon, Richard Heart and his controlled entities, former FTX CEO Samuel Bankman-Fried (SBF), Genesis and Gemini, Celsius, Kraken, Nexo, Beaxy, Bittrex, Binance, and Coinbase.
The SEC also filed its first actions against non-fungible token (NFT) issuers in fiscal year 2023, charging Impact Theory LLC and Stoner Cats 2 LLC.
In addition, the SEC took action in several cases where “influencers” allegedly promoted crypto asset securities without disclosing their compensation for doing so. These individuals included Paul Pierce, Kim Kardashian, Lindsay Lohan, Jake Paul, Michele Mason (Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo), Aliaune Thiam (Akon), DeAndre Cortez Way (Soulja Boy), and Austin Mahone.
Last week, another U.S. regulator, the Commodity Futures Trading Commission (CFTC), revealed that it filed a record number of crypto enforcement actions this fiscal year. “In FY 2023, the CFTC brought 47 actions involving conduct related to digital asset commodities, representing more than 49% of all actions filed during that period,” the regulator stated.
What do you think about the SEC’s enforcement actions against the crypto industry? Let us know in the comments section below.
Bitcoin Net Taker Volume Turns Highly Positive, Bullish Sign?
Data shows the Bitcoin Net Taker Volume has turned significantly positive recently, a sign that may be bullish for the asset.
Bitcoin Net Taker Volume Has Risen To Positive Values Recently
In a new post on X, the CryptoQuant Netherlands Community Manager, Maartunn, pointed out that buying activity appears to be occurring in the market. The relevant indicator here is the “Net Taker Volume,” which measures the difference between the Bitcoin taker buy and taker sell volumes.
When this metric has a positive value, the taker’s buy volume is greater than the taker’s current sales volume. This suggests that the investors are willing to pay more than the spot price to buy the asset; thus, the majority of the market is bullish.
On the other hand, negative values imply a bearish mentality is the dominant force in the BTC sector, as the holders are willing to sell coins at a lower price.
Now, here is a chart that shows the trend in the Bitcoin Net Taker Volume over the last few weeks:
As displayed in the above graph, the Bitcoin Net Taker Volume had a negative value when the dip toward the ,000 level occurred a few days back. Still, before long, the indicator had registered a rise and entered positive territory.
With this switch towards a bullish mentality, the BTC spot price had observed a sharp recovery below the ,000 mark. The chart shows that the metric’s value has only grown more positive since the surge, suggesting that significant buying could be occurring right now.
The price, however, has only consolidated sideways while this has happened. As for what this may mean, the analyst notes, “either limit sellers are taking control, or this thing will explode soon.”
Signs of dropping values of the Net Taker Volume may be worth watching out for, as the Grayscale rally last month had initially seen a sharp surge in the indicator. Still, soon enough, the metric had started to slide back down, potentially resulting in the asset’s retrace.
A few days back, another analyst shared a chart showing that the miners had made significant deposits to the spot exchanges.
Generally, miners transfer their coins to these platforms for selling purposes, so this spike could have been a sign that these chain validators had been gearing up for a dump.
The spike had occurred after BTC’s drop to ,000, implying that the miners had perhaps panicked at the drop, and, hence, had made the deposits as a reaction.
It would appear that the market outweighed the selling pressure caused by this cohort in the end, as the net taker volume had turned positive, and the market had registered a successful rebound.
BTC Price
While Bitcoin has registered some uptrend in the past two days, the overall picture hasn’t changed for the cryptocurrency; its price remains in tight consolidation.
Bitstamp Makes Highly Anticipated XRP Announcement, But Does It Live Up To The Hype?
On Wednesday, August, 2, crypto exchange Bitstamp made a cryptic tweet teasing a new announcement and development for XRP. The exchange kept its promise and made the announcement. However, did it live up to the expectations and hype?
The Big Announcement
Popular digital asset exchange platform Bitstamp has recently unveiled its highly anticipated XRP announcement. The new feature allows users to stake their XRP holdings and earn long-term 2% APY in rewards. This offering is part of the platform’s creative Bitstamp Earn Lending Program, which offers users a reliable and secure means to lend their XRP holdings and earn rewards in return.
Bistamp’s lending service stands out because of its numerous benefits that provide participants with confidence in the whole lending procedure. Bitstamp will also not convert or lend users’ assets without explicit consent and instructions. To partake in XRP staking, users of the platform can easily navigate to the Earn Lending column on Bitstamp. While on the section, they will be offered an option to stake their XRP and earn the mouth-watering 2% APY rewards.
To bolster trust and entrench transparency, Bitstamp has partnered with Tesseract, a renowned firm that is specialized in exclusive lending to trusted borrowers. Tesseract will conduct thorough credit and risk evaluations on all prospective borrowers, thereby augmenting the general safety and reliability of the lending service.
Bitstamp will also render monthly performance reports to enhance transparency. The reports will cover key metrics, such as the risk profile of borrowers, portfolio concentration, and collateral levels.
Members of XRP React
The recent announcement has sparked a wave of expectations and reactions within the XRP community. The announcement of the 2% APY on XRP lending has been met with disappointment as community members expected a more groundbreaking revelation.
Community members had previously speculated on the nature of the announcement, with some XRP proponents speculating that Bitstamp may consider a full integration with the XRP Ledger (XRPL) decentralized exchange (DEX).
Popular XRP community members like Dig Perspective emphasized that while the 2% APY looks good, the community expected something more remarkable.
No offense @Bitstamp. 2% is great but we were looking for a bit more,if you have it to share? https://t.co/0iinJWFYi6
— Digital PerspectivesPermaBull
(@DigPerspectives) August 3, 2023
Whichever way it goes, it remains to be seen if Bitstamp will live up to its promises.
XRP’s price is currently trading at .66, representing a 0.65% and 7.17% decline on the daily and weekly charts, respectively.
SEC Chair Gary Gensler Says Crypto Is a Highly Speculative Field ‘Rife With Fraud’
U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler has called crypto “a highly speculative asset class” and a field that is “rife with fraud.” He stressed that there are far too many bad actors in crypto, noting that crypto platforms often commingle funds and trade against their customers.
Gary Gensler Says Crypto Field Rife With Fraud
The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, slammed crypto in an interview with Bloomberg on Thursday.
“In this field of crypto investing, a lot of investors should be aware it’s not only a highly speculative asset class, it’s also one that they currently should not assume that they are getting the protections of the securities law, even though the securities laws apply to many of those tokens without prejudging anyone. But, you as investors are not getting the full, fair, and truthful disclosure,” the SEC chair cautioned.
Gensler added:
The platforms, the intermediaries are doing things that we would never in a day allow or think the New York Stock Exchange or Nasdaq would do.
“The platforms often are co-mingling and trading against you and have market makers that are on the other side of your trades. And we don’t allow that in the rest of our securities markets,” he continued.
The chairman of the SEC asserted:
Right now, this is a field rife with fraud, rife with hucksters … there are good-faith actors as well but there are far too many that aren’t.
The securities regulator recently requested a budget increase to address the risks posed by the crypto market. Gensler said in March that the SEC needs new tools, expertise, and resources to regulate the crypto industry.
Many people have criticized the SEC chairman for regulating the crypto industry by enforcement. U.S. Congressman Warren Davidson (R-OH) even introduced legislation to remove Gensler as the chairman of the SEC “to correct a long series of abuses.” The lawmaker said: “U.S. capital markets must be protected from a tyrannical chairman, including the current one.”
What do you think about SEC Chairman Gary Gensler’s statements regarding the crypto industry? Let us know in the comments section below.
FTX Debtors Report $8.9B Shortfall in Customer Funds and ‘Highly Commingled’ Assets in Latest Presentation
On March 2, 2023, FTX debtors released their second stakeholder presentation, which contains a preliminary analysis of the now-defunct cryptocurrency exchange’s shortfalls. The latest presentation reveals a significant shortfall, as approximately .2 billion of the company’s total assets were found in FTX-related addresses, but only 4 million is considered “Category A Assets,” or liquid cryptocurrencies such as bitcoin, tether, or ethereum. In addition, John J. Ray III, FTX’s current CEO, stated that the debtor’s effort had been significant, and he added that the exchange’s assets were “highly commingled.”
A Preliminary Summary of What Contributed to FTX’s .9 Billion Shortfall
FTX debtors and CEO John J. Ray III have released a comprehensive presentation documenting FTX’s shortfalls. The preliminary report mentions the cyber attack that occurred the day after FTX filed for Chapter 11 bankruptcy protection on November 11, 2022. In a now-deleted Telegram chat channel, FTX US general counsel Ryne Miller described the exchange being hacked and that the platform was unsafe. The preliminary shortfall analysis refers to this specific cyber attack throughout.
The report also mentions that both FTX and FTX US typically held digital assets in sweep wallets that were not segregated for individual customers. The debtors noted that due to the cyber attack, the company’s computing environment was secured and “remains subject to certain restrictions,” limiting access to crucial data. The report categorizes FTX’s holdings into two groups: “Category A Assets,” which have larger market caps and trading volumes, and “Category B Assets,” which do not meet the liquidity requirements of Category A Assets.
However, despite identifying all the assets, an .9 billion shortfall remains. “There is a substantial shortfall at the FTX.com exchange at the time of the petition, defined as the difference between digital asset claims on the FTX.com ledger and digital assets available to satisfy those claims,” the report states. “The shortfall is particularly significant for Category A Assets. Only a small amount of cash, stablecoin, [bitcoin], [ethereum], and other Category A Assets remain in wallets preliminarily associated with the FTX.com exchange.”
The report also notes that while the shortfall at FTX US was substantial, it was smaller than that of the international exchange. In a press release, CEO Ray shared his thoughts on the presentation and mentioned that funds were commingled and record-keeping was inadequate.
“This is the second in what the FTX Debtors anticipate will be a series of presentations as we continue to uncover the facts of this situation,” Ray said in a statement. “It has taken a huge effort to get this far. The exchanges’ assets were highly commingled, and their books and records are incomplete and, in many cases, totally absent.” He stressed that the information provided by the debtors was preliminary and subject to change.
One interesting aspect of the latest debtors’ presentation is that ftx token (FTT), the company’s exchange coin, is classified as a Category B Asset. While BTC and ETH are Category A Assets, SOL, MATIC, UNI, SHIB, PAXG, WBTC, and WETH are also considered A-class assets. The report also highlights the daily deposits and withdrawals made 90 days prior to the bankruptcy petition date.
Additionally, the exchange’s shortfall does not include Alameda Research assets, which consist of 6 million worth of solana (SOL) and aptos (APT), 0 million held at third-party exchanges, 5 million in stablecoin assets held in cold storage, and 9 million in bitcoin (BTC) held in cold storage.
What do you think the fallout of FTX’s significant shortfall will be for stakeholders? Let us know what you think about this subject in the comments section below.
ETH Whales Scoop Up SAND – Up Nearly 80% – For Its Highly Bought Crypto Menu
The Sandbox is one of the leading players in the GameFi space. Its native token SAND is now going down the net of ETH whales as the altcoin rally continues into its third week. According to CoinGecko, the token has gone up by 76% in the past two weeks.
ETH whales are also adding fuel to this fire, accumulating SAND and including the crypto on its top 10 tokens bought in the past 24 hours. Along with the recent release of Game Maker 0.8, The Sandbox ecosystem is expected to continue to be a dominant player in the GameFi space.
JUST IN: $SAND @TheSandboxGame now on top 10 purchased tokens among 100 biggest #ETH whales in the last 24hrs
Check the top 100 whales here: https://t.co/N5qqsCAH8j
(and hodl $BBW to see data for the top 5000!)#SAND #whalestats #babywhale #BBW pic.twitter.com/nWQoR6vWNX
— WhaleStats (tracking crypto whales) (@WhaleStats) January 15, 2023
More Support From ETH Whales
The whale buying spree has effectively pushed the price of SAND up on the broader market market. Looking at the charts, the token is up almost 80% in the past two weeks. This in turn made the token test the .7540 price resistance level.
On top of the whale buying spree, the release of Game Maker 0.8 certainly has an effect on the token. According to the development team’s Medium post, this upgrade brought features that were requested by the community in the past.
New multiplayer gameplay features, new lighting and post-processing effects, and the addition of audio and video streaming on the platform will certainly bring more attention to the platform and the GameFi space. With gaming companies noticing the power of Web3 development, platforms like The Sandbox will continue to rise in popularity.
Is SAND Standing On Solid Ground?
As the time of writing, the token is changing hands at .7044. With crucial support at .5015, this may be enough for SAND to sustain higher highs and higher lows. ETH whales should be careful, however, as a break below the .6327 support would delay a possible break above .7540.
Bitcoin’s current strong momentum is being reflected by the token in the short to medium term as well. This means that if ever BTC – the world’s biggest crypto asset in terms of market cap – continues its momentous climb to breach the ,500 resistance, SAND would see gains above .8626 which would wipe the losses that occurred when crypto exchange FTX collapsed.
A breakthrough like this would trigger a bigger rally. However, if the rally is met with resistance, investors and traders should consolidate above .6327 to support further bullish movement in the coming days and weeks.
Improvements in the macroeconomic situation should also help SAND’s price to secure crucial consolidation levels. With inflation seemingly going down, the ecosystem and SAND would benefit from its high correlation with Bitcoin and Ethereum.
-Featured image: Screen Rant
Exploiter Of “Highly Profitable Trading Strategy” Arrested In Puerto Rico
A few months can feel like a lifetime in crypto. However, it probably hasn’t felt like long enough for Mango Markets exploiter Avraham Eisenberg, who was taken into custody in Puerto Rico this week. Eisenberg gained notoriety on crypto Twitter after describing his nine-figure exploit of the Solana-based protocol as “a highly profitable trading strategy.” On Twitter and across other outlets, Eisenberg was insistent that his exploit was simply taking advantage of the protocol’s code, and that his actions weren’t illegal or even immoral.
However, U.S. federal prosectors seem to disagree.
An Exploiter’s Endeavor
In October, Eisenberg exploited Solana-based Mango Markets and made headlines not just for the exploit – which was essentially a ‘looping’ exploit, manipulating the price of the MNGO token – but also for the outlandishly-sized ‘bug bounty’ that Eisenberg managed to walk away with. B
ug bounties are commonplace for exploiters – often ‘white hat’ exploiters who look to take advantage of code for the ‘better of society’ – but never have amounted to a payout this large. While Eisenberg attempted to include language in a Mango protocol proposal that could shield him from “criminal investigations,” that didn’t slow the U.S. DoJ and FBI from looking into his activity.
At the time of our October publishing on the matter, it was unclear if Mango would be able to make a recovery; little did we know how much damage the Solana ecosystem would face in the 60 days following that event. Since the exploiter’s endeavor, Solana’s defi landscape has crumbled, FTX fallout has impacted the chain drastically, and it’s once flagship NFT community is facing intense pressure with the departure of signature projects DeGods and y00ts.
Mango Madness, Continued
Court documents have been unveiled this week, shedding light on Eisenberg’s arrest in Puerto Rico. An initial filing, dated December 23, 2022 and released this week, federal prosecutors outline two separate charges surrounding Eisenberg’s “scheme involving the intentional and artificial manipulation of the price of perpetual futures contracts” on Mango. The 14-page filing details how Eisenberg manipulated MNGO perps, detailing his movement between wallets.
The filing closes by mentioning that Eisenberg attempted to flee law enforcement by swiftly departing the U.S. to Israel, and highlights the belief that Eisenberg was well aware of the illegality of his actions, based on Twitter activity. The document is rounded out by a request from the FBI agent to issue a warrant for Eisenberg’s arrest.
A second filing, dated December 27, confirms his arrest in Puerto Rico. Crypto Twitter rejoiced with memes surrounding Eisenberg’s arrest.
Survey Reveals Turkey is Highly Obsessed With Crypto, Especially Dogecoin
The entire crypto industry has been experiencing a winter since the last quarter of 2021. Some cryptocurrency prices experienced a massive price slump, with many declining over 65%. However bad things may look, crypto may not go extinct as its popularity has not reduced.
A recent study by CryptoManiaks, a crypto education platform, shows that Turkey and the Netherlands ranked top in cryptocurrency awareness. As per the survey, 5.5% and 8.2% of the population in Turkey and the Netherlands searched for crypto-related terms. Turkey accounted for 4.7 million searches, topping the chart with large numbers.
Turkey has made tremendous improvements in crypto adoption since the beginning of 2022. A 2022 research by the Turkish crypto exchange Paribu estimated that at least 8 million people in Turkey engaged in crypto. Turkish President Recep Tayyip Erdogan spoke about the benefits of blockchain innovations. In his statement, Erdogan added that Turkey wants to be a producer of digital assets, not a consumer.
DOGE Outranks Ether In Terms Of User-Curiosity In Turkey
The latest CryptoManiaks study analyzed the number of searches for some selected cryptocurrencies. They represented the number of cryptocurrencies as a percentage of the population for each country to calculate the monthly local searches.
Turkey ranked second in the overall study and first with 812,000 monthly searches related to Dogecoin. According to the survey, the number of searches for Dogecoin doubled that of Ethereum, the third most searched crypto in the country.
CryptoManiaks’ spokesperson commented on the rising Dogecoin curiosity over the last 12 months. He said Dogecoin’s popularity has significantly exceeded Ethereum’s, with almost 2 million monthly searches worldwide.
DOGE became popular after Elon musk revealed plans to make it the official token for Twitter monetization. As a result, the memecoin’s price soared to an all-time high within the week of the complete official acquisition of the social media platform by Elon Musk.
The survey didn’t feature only DOGE and Ethereum. It also featured Solana, BNB, Bitcoin, and others. After Turkey and the Netherlands, Canada, Germany, and the Czech Republic followed in ranking.
Bear Market Didn’t Cripple People’s Interest In Crypto
Although the United Kingdom and the United States are top global players in the cryptocurrency industry, none ranked in the top. That is because the number of searches is insignificant compared to their population sizes. For example, the United States ranked 15th, with 1.9% of its population searching for crypto-related terms, whereas the United Kingdom took the 12th spot with 2.6%.
Recent research by Cointelegraph also showed that the bear market did not affect the interests of several institutions in the Crypto industry. According to the report, top institutions are still interested in the cryptocurrency industry and continue to invest millions in crypto-related projects.